Mortgage Rates Are Falling, but a Housing Shortage Is Squashing Demand
Mortgage rates are coming down from peak highs, but a lack of for-sale housing is leaving prospective buyers stranded
April 5, 2023
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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $726,200 or less dropped to 6.40% from 6.45% last week, but with new listings down 20% year-over-year and total inventory falling to half of what it was pre-pandemic, buyers aren’t in any hurry to make a market comeback.
Mortgage applications to purchase a home dropped 4% last week compared with the previous week, and demand was 35% lower than the same week one year ago, CNBC reports.
“Spring has arrived, but the housing market is missing the customary burst in listings and purchase activity that typically mark the season. After four weeks of increasing purchase application activity, volume declined a bit this week even with another small drop in mortgage rates,” said Mike Fratantoni, MBA’s chief economist.
